Streaming viewers increasingly choose ad-based options over ad-free

A new report from the Video Advertising Bureau (VAB) indicates that consumers are increasingly turning to ad-supported streaming options as they reassess the cost of ad-free subscription services.

Released June 24, the report titled “Staying Current on Streaming: The Latest on Connected TV Consumer Behaviors” outlines shifts in viewer preferences, citing a broad move toward free ad-supported streaming television (FAST) channels, streaming bundles and more interactive advertising formats.

Citing data from LG Ad Solutions, the report states that 26 percent of consumers have added a free streaming service within the last year, with 24 percent planning to do so in the coming year. It also found that 62 percent of connected TV viewers expressed concern about recurring subscription fees. According to the VAB’s analysis of Emarketer data, the combined monthly cost of ad-free plans across seven major platforms has risen more than 50 percent over five years.

The shift spans demographics, with consumers across income levels and age groups increasingly opting for ad-supported content. The VAB’s analysis of MRI-Simmons data found that two-thirds of U.S. adults prefer ad-supported streaming services over ad-free alternatives.

FAST services are now used by one-third of the U.S. population, according to Emarketer, positioning them as a viable path to reach over 100 million viewers. The report also highlighted growing interest in bundled streaming services, citing CTAM data indicating nearly half of U.S. households either subscribe or plan to subscribe soon.

Innovid data referenced in the report shows that interactive connected TV ads result in 71 additional seconds of viewer engagement compared to standard pre-roll advertisements.

Jason Wiese, executive vice president of strategic insights and measurement at VAB, noted that viewers are adjusting their streaming strategies to balance cost and content access, often choosing ad-supported models as a compromise.

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